But the lower CEO rating hardly puts Ballmer's job in jeopardy, said a Microsoft watcher.

"As long as Steve Ballmer has the second-largest block of stock and the backing of Bill Gates, he's not going anywhere except under his own power," said Rob Helm, an analyst with Directions on Microsoft, an industry research firm that focuses on the Redmond, Wash. developer.

The index, which was created by analysts at Chicago-based Applied Finance Group and a New Jersey consultancy called Great Numbers, was published by Chief Executive magazine, which issued its third-annual numbers today.

The rankings attempt to rate "business leaders who have performed best in creating true economic value" for their firms, said Michael Burdi of Applied Finance Group and Drew Morris of Great Numbers.

Dubbed the "CEO Wealth Creation Index" (WCI), the rankings use a concept called "economic margin," which measures the degree to which a company makes money above and beyond its risk-adjusted cost of capital.

Each CEO is rated in several categories, including "Market Value/Invested Capital," a measurement of how investors value the company's assets relative to their cost; the average of the company's last three years' economic margin scores; the change to the economic margin in the past year; and a management quality score. All four scores were calculated from Applied Finance Group's proprietary metrics.

The WCI gave Microsoft and Ballmer an "F" in the economic margin change from 2009 to 2010, meaning that the company was in the bottom 20% of the 500 evaluated. Microsoft was awarded an "A" in management quality, however.

Forty-five CEOs out of the 500 assessed by the WCI fell even further than Ballmer, including Marc Benioff of customer relationship management (CRM) provider Salesforce.com, who dropped 75 places to No. 105; and John Riccitiello, the CEO of game maker Electronic Arts (down 90 spots to No 261).

Helm defended Microsoft's performance.

"Microsoft has managed to protect its Windows and Office businesses [in 2010] and has even made some headway in the core business of its biggest threat, namely Google," Helm said in an e-mail reply to questions today. "There are some shark fins showing up offshore from the iPad and upcoming imitators, but the company has time to respond."

In October, Microsoft reported a 25% increase in revenue for the quarter that ended Sept. 30 over the same period in 2009, and said the $5.4 billion in net income during that quarter represented a 51% increase from the same period a year before.

Apple's Jobs, meanwhile, pushed his ranking to No. 4, up 31 spots from 2009's No. 35. The WCI gave Apple and Jobs straight "A" grades in all four categories, indicating that it was in the top 20% of the measured companies in each.

One indication of Apple's rise during 2010 was when Apple passed Microsoft as the world's largest technology company when measured by the total value of its shares, or market capitalization.

The only technology-related firm that placed higher than Apple in the WCI was Priceline.com, the online travel booking company, whose CEO Jeffery Boyd was ranked first in the index.

Other tech corporations and CEOs in the top 40 included Amazon's Jeff Bezos at No. 5, down one spot from 2009; travel site Expedia's Dara Khosrowshahi (No. 13, up 92 places); and IBM's Samuel Palmisano (No. 39, up 27 spots).

On Monday, Microsoft's stock price was down 9.5% from its 2010 high of $30.89. Apple shares, meanwhile, were up 71% from the year's low of $188.95.